SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Dell Technologies Inc.
DELL 122.70+0.2%Nov 18 3:59 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: JPR who wrote (63730)9/4/1998 2:32:00 PM
From: freeus  Read Replies (1) of 176387
 
Since traditionally P/E is "supposed" to be at or below the company's earnings growth, the message we keep getting is "Buy only undervalued stocks" meaning "Buy only stocks whose p/e is below the current rate of growth of earnings". The problem for us Dellheads and other tech shareholders is, if Wall St really goes back to investing that way, tech stocks get hit badly. In other words if investors flock back to "p/e" valuations when they have a "flight to quality" then companies with large growth rates but even larger p/e's may get pummeled.
How can p/e be used reasonably? Well the belief of p/e pundits is that eventually the stock will sell at the price where p/e = growth rate (of earnings). Since the word "eventually" can mean anytime, I dont know how you prove or disprove that.
With DELL because it is growing so amazingly (the company) we just figure the share price will too.
Freeus

Look at KO: for the longest time because of the name it supported a high p/e. But now that the market is collapsing some say it is going back to its proper value. Personally I dont think this bear market really proves much, and when the market recovers ko (and others like it) will too and once again p/e wont be how investors invest.
I hope this makes sense. If not, someone else's answer might.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News